Australia - Operator calls for an independent board to govern the NBN to ensure competition

[the australian] OPERATION of the $36 billion National Broadband Network should be put out to competitive tender if the project is to have a chance of being a commercial success, a senior industry figure has warned.

Optus chief executive Paul O'Sullivan said tenders for operation of the giant fibre network should be issued on a state-by-state basis to enhance competition and ensure the NBN has the best chance of delivering acceptable levels of customer service.

"These contracts should be reviewed every (few) years, based on the quality of service and efficiency of each of the operators," he said. "By having a variety of operators it will be possible to do comparisons between them.

"What's also important is that no retail carrier is able to take control or have a strong say in the operation of these companies."

Delivering a keynote presentation to a gathering of technology media on the Gold Coast, Mr O'Sullivan said the NBN should also be overseen by an independent board to ensure its operation remains at arms' length both from government and existing telecommunications players.

He likened such a body to Australia's Reserve Bank which is free to set monetary policy without direct government influence or intervention.

"Whatever the model it is important we have a structure in place to ensure we don't create another lumbering monopoly. We can't afford for the NBN to become the British rail or Telstra of the 21st century," he said.

Mr O'Sullivan, who has maintained a relatively low profile in the ongoing debate surrounding the NBN, said it was time to move on from the arguments about whether it should be built and instead focus on how it can best serve Australians.

"I want to take the view that the NBN is almost certainly going to be built," he said. "We can see that in the way that the Government is rolling (it) out now."

However he believes the ongoing debate has "shrunk" and many of the issues that should be being discussed are disappearing under arguments about things such as funding and fixed verses wireless networks.

Mr O'Sullivan also called for greater transparency over the agreements being Telstra and NBN Co around the migration of customers from the carrier's ageing copper phone lines onto the new network.

He cautioned that Telstra should be prevented from using the $11bn in payments it will receive for its customers as a way to subsidise their transfer to the NBN.

He said this will create an "uneven playing field" where other service providers will be disadvantaged as their costs of customer acquisition will be significantly higher.

"There will be a land-grab in the first years of the NBN," he said. "It will in fact be ‘stickier' for customers than any previous service, as it will be carrying television, broadband and (things like) cloud services. It will be difficult to churn."

Mr O'Sullivan also highlighted another area of concern around content and how steps need to be taken to ensure competition in this vital area remains strong in the era of the NBN.

He said a key concern is the rise of a "winner takes all" organisations which could potentially limit people's access to different sources of content.

Mr O'Sullivan pointed to companies such as Google and eBay which have reached such critical mass that other companies find it difficult to compete.

"There is a huge cliff edge for any second entrant who wants to be a challenger in those application areas," he said. "I don't have the answers, but I think it's a debate that needs strong discussion if we're to avoid the development of monopoly-type providers in the application world."

Independent board should run NBN, says Optus chief